The special apportionment: what owners need to know

As the owner of a condominium and a member of a condominium owners' association , you may have to pay a special contribution. In this article, you can find out exactly what a special levy is, when it is due and how high the contributions usually are.

What is the special allocation?

The special levy is used by condominium administrators to cover extraordinary financial needs in the community of owners. The special apportionment is levied in addition to the house allowance and the maintenance reserve and is used to finance unforeseen or major expenses.

The special apportionment is regulated in Section 16 (2) of the German Condominium Act (WEG). The amount of the special apportionment is not limited by law.

When does a special allocation make sense?

• Major measures: If major repairs or renovations are pending that are not or only partially covered by the maintenance reserve, a special levy can close the financing gap.
• Major purchases: A special apportionment may also be required for larger purchases, such as a new heating system.
• Liquidity bottlenecks: If the current income is not sufficient to cover the running costs, a special levy can restore the community's liquidity. This can be the case, for example, if the economic plan was calculated too tightly or if there are shortfalls in the house rent.
• Settlement of old liabilities: A special apportionment can also be used to settle old debts of the condominium owners' association.

When and how often is the special contribution due?

As you now know, a special allocation is due in a condominium owners' association if a specific, unforeseen need for financial resources arises that cannot be covered by the existing reserves from the owners' regular funds, i.e. the house rent. It is advisable to set a clear due date in the resolution on the special allocation. This creates transparency and helps to avoid disputes.

In principle, the special levy is a one-off payment that is due in addition to the regular contributions of the owners. Only those owners who are entered in the land register on the due date are liable for the special levy.

In the case of higher special levies that serve to finance larger measures, it may make sense to divide the due date into installments. This makes it easier for the owners to bear the financial burden.

• Specific reason: There must be an actual need for additional funds, e.g. due to unexpected repairs, renovations or other unforeseen expenses.
• Insufficient reserves: The existing reserves are not sufficient to cover requirements.
• Resolution of the owners' meeting: Each special allocation must be approved by a separate resolution of the owners' meeting.

The frequency of special allocations

How often a special allocation is incurred in a community of owners depends on various factors. One of these is the amount of the regular house payments: Higher contributions enable a greater build-up of reserves and reduce the likelihood of special levies. Secondly, the scope of maintenance and modernization measures also plays a role. The more measures are required, the higher the risk of unexpected expenses for the property.

The resolution on the special contribution

The owners decide by resolution on the levying of the special contribution. However, the condominium administrator has discretionary powers when determining the amount of the special allocation. It is important that the special levy is calculated in such a way that it covers the actual financial requirements.

The following aspects must be taken into account when calculating the special allocation:

• Realistic determination of requirements: The special allocation must fully cover the anticipated costs.
• Consideration of payment defaults: If it is foreseeable that not all owners will be able to pay on time, this must be taken into account in the amount of the special apportionment.
• Dealing with house money shortfalls: Defaulting owners must also contribute to a special apportionment that has arisen due to shortfalls in house money. However, their expected shortfall must be taken into account in the calculation.
• Calculation of further defaults: If further defaults on house charges are to be expected, this should be factored into the special apportionment in order to ensure the liquidity of the community of owners.

Contesting a resolution on a special allocation

Owners often have concerns when it comes to paying a special allocation. In this case, the owners have the right to object to the resolution to levy a special apportionment. This may be the case, for example, if it does not comply with the principles of proper administration, such as in the case of unnecessary renovation measures.

It is possible to vote against the special levy at the owners' meeting. However, if the majority vote in favor of levying the special contribution, those who voted against it are also obliged to pay, provided the following conditions are met:

1. The majority of owners voted in favor of the special levy.
2. The expenses are proportionate or the costs are spread over a reasonable period of time.

Contesting a levy in 4 steps

If the special allocation is to be contested, the following steps must be observed:

1. Timely challenge: The resolution must be challenged within the statutory period (usually one month after the resolution is passed).
2. Written justification: The objection should be made in writing and the reasons for the challenge must be set out in detail.
3. Legal examination: It is advisable to consult a specialist lawyer for residential property law to assess the prospects of success of the objection.
4. Legal proceedings: If necessary, a lawsuit must be filed with the competent district court to have the legality of the decision reviewed.
5. Evidence: In the proceedings, it must be explained why the resolution on the special allocation is not lawful, e.g. due to formal errors or disproportionality of the measure.

Please note that the obligation to pay the special apportionment is not initially suspended. Owners should pay the apportionment subject to reservation in order to avoid the consequences of default.

Furthermore, the levying of a special levy cannot be contested if costs have already been incurred as a result of renovation measures that have to be paid.

The role of the distribution key of the shared property

The distribution key is an essential component of every special apportionment. In principle, the statutory or agreed distribution key, also known as the co-ownership share (MEA), is applied. This means that the costs are usually distributed according to the co-ownership shares, but they can also be determined differently by resolution of the condominium owners.

This exception applies if a different distribution key has been decided for a specific measure in accordance with Section 16 (4) of the German Condominium Act (WEG). Please note, however, that the requirements for such a different distribution key are very strict according to current case law of the Federal Court of Justice (BGH).

A resolution on a different cost allocation, and therefore also a corresponding special allocation resolution, requires a double qualified majority of the owners. This means that not only must three quarters of all owners agree, but also more than half of the co-ownership shares must vote in favor.

Special apportionment and change of ownership: Who bears the costs?

In the event of a change of ownership, the decisive factor is who is registered as the owner(s) at the time of entry in the land register. The new owner(s) is/are responsible for all payment claims from this point onwards.

This means:

• Purchase contract signed, condominium not yet handed over: The seller pays the special apportionment.
• Entry in the land register is made before the apportionment is due: The new owner(s) is/are obliged to pay.
• Entry in the land register takes place after the apportionment is due: The old owner(s) is/are obliged to pay.

Example: Special allocation for a roof renovation

You are a co-owner in a community of owners. At the annual owners' meeting, it was decided that the roof of the property needs to be renovated. As the roof is part of the common property, all owners bear the costs jointly.

The invoice

• Existing maintenance reserves: € 30,000
• Cost of the roof renovation: € 80,000
• Required special contribution: € 50,000 (€ 80,000 - € 30,000)

In this case, the owners must raise a special contribution of at least €50,000 to finance the roof renovation. The special levy is often set higher in order not to use up the maintenance reserves completely.

The distribution of costs

Let's assume that your community of owners consists of 6 co-owners, each with equal co-ownership shares (MEA). In this case, the special contribution of €50,000 is divided equally among the 6 owners:

• Costs per owner: € 8,333.33 (€ 50,000 / 6)

Each member of the community of owners would therefore have to contribute €8,333.33 to the special apportionment.

Important tips for paying the special contribution

• The actual amount of the special contribution may vary, as it depends on various factors (e.g. condition of the roof, offers from tradesmen, decision of the owners).
• The distribution of costs is usually based on co-ownership shares, but can also be regulated differently (see declaration of division).
• As an owner, it is advisable to find out about the upcoming special apportionment at an early stage and to build up reserves if necessary.

Is the special contribution tax-deductible?

Whether you can deduct the special allocation from your taxes depends on whether you use your condominium yourself or rent it out.

• Owner-occupiers: Owners who use their condominium themselves cannot deduct the apportionment from their taxes. However, they may be able to claim the costs of handyman services provided as part of the special apportionment as household-related expenses in their tax return.
• Renting: Owners who rent out their condominium can deduct the special allocation as income-related expenses from their rental income. However, this only applies if the allocation is used for measures related to the rental (e.g. repairs, maintenance).

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